Last night 60 Minutes interviewed a Chinese real estate mogul followed by a piece questioning the sustainability of property development in that country [see video below]. It appears the emerging Chinese middle class are investing in property because real estate has always gone up more than inflation. Sounds familiar?
The building of malls with no prospects for luring tenants has been known for a couple of years, but it appears to apply to entire cities in China. This could be the reason a stock like Cliffs Natural Resources (CLF), a major exporter of iron ore, has collapsed.